Explaining the nuances of the proposals announced by Finance Minister Piyush Goyal in his interim budget speech, Chandra said, "This (zero income tax) rebate is only for persons whose taxable income is Rs 5 lakh". He added means those with gross income up to Rs 6.50 lakh may also not have to pay any income tax if they make investments in provident funds, specified savings, insurance etc.
Also Read| Budget 2019: No tax for Rs 5 lakh income, says FM.
Those earning less than Rs 10 lakh can still benefit because of the increase in the limit of exemption available on house rent and children's tuition fees.
- Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees; can be exercised once in a lifetime. Also, they will be exempted from additional deductions of up to Rs 2 lakh on interest on homes loans, education loans, etc.
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Goyal, who is presenting the Budget 2019 in place of Arun Jaitley as he is in the USA for treatment, said announced the increase in the gratuity amount from Rs 10 lakh to Rs 20 lakh. So, only those whose total income does not exceed Rs 5 lakh will be eligible for the benefit. The government has announced a rebate under Section 87A of the Income Tax Act, which has been hiked to Rs 12,500 from the earlier rebate of Rs 2,500.
The minister said that the direct tax collection has increased to Rs12 lakh crore in the 2018-19 financial year from Rs 6.38 lakh crore in 2013-14. So, we will give a rebate of Rs 12,500 straight so that everyone who is filing a return up to Rs 5 lakh of net income will absolutely be a tax exempt case. Income from Rs 5 lakh to Rs 10 lakh was taxed at 20 per cent and above Rs 10 lakh was at 30 per cent.
Standard deduction, too, has also been raised to Rs 50,000 from Rs 40,000.
The Indian automobile industry was watching the Interim Budget 2019 with great interest. This was introduced past year after being abolished in the Finance Act 2005.